At Consolidated Insurance Brokers we specialise in Lost Profits Insurance
If your business suffers a claim for Accidental Damage or Perils, then you may not be able to trade while it’s being fixed. This might put a bit of pressure on your cash flow as although certain expenses may cease if you’re not trading, a lot of costs will continue, and you’ll still want to put food on your own table.
You can insure for this lost profit – how it is insured will depend on how you operate. If you’re a property owner, then it will need to be insured for the value of the rents that were being received when your building burnt down. If you’re a factory workshop, you might insure for your fixed expenses and payroll so you can keep staff paid, if you had a small fire that closed you down for 3 months.
How long you need Lost Profits Insurance will depend on your situation – it might only take 6 months to redo your fitout, but your business could have lower profits for a further 12 months after this while you re-establish your customer base.
The key thing to remember about this cover is that it generally requires a claim under the Property Damage section. For example, if you’re not insured for Flood for Property Damage, then you won’t get Lost Profits if a Flood stops you from trading. It’s also important to remember this is cover if your business suffers damage – if you’re worried about lost income if YOU become sick or injured, then you need to look at Accident & Sickness Insurance.